Share of non-performing loans in Montenegro climbs to 19.9% at end-May 2013

By bne IntelliNews July 23, 2013

The share of non-performing loans (NPL) in Montenegro climbed to 19.9% of total gross loans at end-May from 19.5% in April and 18.7% in March, IntelliNews calculations based on central bank data show. The volume of non-performing loans inched up 2.5% m/m to EUR 493mn at end-May.

The end-May share of  loans with payments delayed for over 30 days in total gross loans stood at 27.4%, while their value totalled EUR 680mn, according to the latest central bank governor report.

The rising share on non-performing loans (NPL) has been a key factor constraining credit supply in Montenegro. In February, the country asked the EBRD for help in a bad loans restructuring project that should support the domestic banking industry.

The share of NPL in total loans in Montenegro stood at 7.2% at end-2008 but accelerated to 18.7% at end-September 2012, according to IMF data issued in April 2013. The credit activity has picked up since January 2013 after retreating in annual terms since January 2010 (latest available).

The World Bank said in a June 2013 report on South-East Europe that despite some decline in the level of bad loans due to large sales of problematic assets to factoring companies, the level of NPL in Montenegro remains among the region’s highest. The Bank also warned NPLs in the country are still rising as there has been limited progress on restructuring or resolution.

NPLs in the SEE region started increasing again in the second half of 2012 after briefly stabilising, due to a deteriorating loan quality and difficulties banks have in writing off NPLs because of weak insolvency regimes, the report said.

Related Articles

Montenegro’s PM confirms readiness to join Nato - despite shove from Trump at alliance summit

Montenegro’s Prime Minister Dusko Markovic said on May 25 that the Adriatic country is fully prepared to ... more

Ex-Montenegrin President Marovic missing after receiving prison sentence

Montenegro’s court issued an arrest warrant on May 12 for former President Svetozar Marovic who has not been found in his hometown and has not ... more

Adriatic ports hit by Venice tourist clampdown

The number of cruise ships visiting Dubrovnik and other Croatian ports is set to fall dramatically in 2017, a new report presented at the Adriatic Sea Forum has revealed.  As the historic ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Dismiss